The USE-IT Project Journal #1

December 2017 Author: Zeno Winkels UIA Expert The FED Project Journal N°1 Project led by the City of Gothenburg The FED project With this project, the city of Gothenburg aims to develop, demonstrate and replicate a novel district level energy system, integrating electric power, as well as heating and cooling. This solution embraces and enhances the use of technologies such as PVs, heat-pumps and wind into a larger system. To overcome the main challenges, the proposed solution contains advancements in system development and operation, business logistics, legal framework as well as stakeholders’ acceptance. The FED solutions consists of three cornerstones: FED demonstrator area – The selected demonstration is located at a campus with about 15 000 end-users. It has a well-balanced set of property owners, energy infrastructure, and users, including prosumers as well as buildings with different needs and usage profiles. The area is exempted from the law of concession for electricity distribution, providing the opportunity to test and validate a local energy market. The prerequisites to optimize the use of primary and secondary energy using intermediate storage are well developed, as they are for generation, storage and distribution. FED System solution – Our solution will optimise the use of low-grade energy to replace primary energy. Adding fossil-free energy sources while optimising different buildings usage profiles; one building’s energy needs will be balanced with the surplus of another. Intermediate storage, fundamental to be a success, consists of heating/cooling storage in the building’s structure, accumulation tanks or geothermal heat pumps, and batteries for electricity. An ICT service will support future volatile energy markets. FED Business solution – Create new sustainable markets. The success of FED depends on cooperation and energy exchange between several stakeholders. To make it happen, a local energy market creating business value for each stakeholder will be developed. Partnership: Göteborg Stad Johanneberg Science Park AB - Public/Private Company Göteborg Energi AB - Public Company Business Region Göteborg AB - Public Company Chalmersfastigheter AB - Private Company Akademiska hus AB - Private Company Chalmers - Research Centre RISE Ericsson AB - Private Company Table of Contents 1 Executive Summary ............................................................................................................ 1 2 Smart grids in Europe ......................................................................................................... 2 3 Project goals FED ............................................................................................................... 5 4 The FED partnership .......................................................................................................... 6 5 The FED solution .............................................................................................................. 11 6 Goals and process ............................................................................................................ 12 7 Interview RISE .................................................................................................................. 14 8 Challenges ....................................................................................................................... 17 9 Next steps ........................................................................................................................ 19 1 Executive Summary Dear reader, As I travelled to Gothenburg to study the FED project I studied the quote from its mayor Ann- Sofie Hermansson, once more: “The FED project confirms Gothenburg as a frontrunner in developing the energy solutions of a fossil-free society. The idea is to reduce energy consumption by establishing a local market place for electricity, heating and cooling. Hopefully, this model will prove capable of speeding up the energy transition across Europe.” I am really happy that I get to fully grasp what it takes to do that and accompany the project in the following years. I will be there when the partners will try to: . reduce external energy input . reduce peak loads . establish a market place The results of these type of projects come with good design and preparation and it is in this phase of the project that I visit them for the first time. As expected, the project lead walks me through the area and we prepare a partner meeting together. It is visible that the partners have been cooperating for many years and that they are well prepared for the challenge they have set themselves. The project is now a couple of months after the final investment decisions and the Academics from Chalmers have shown their models and results. This report does not focus on these two deliverables, but kicks off with a look at the market design RISE has made to make trade in heat, electricity and services on one market at Johanneberg in Gothenburg, possible in the first place. Zeno Winkels 1 2 Smart grids in Europe Policy context Improving energy efficiency is a priority of the sustainable heating and cooling systems, which EU's Energy Union strategy. Energy efficiency has are well-functioning and result in a high-quality, been identified as a key element for fostering efficient and low-carbon heat and cold supply to European competitiveness, and for ensuring a its buildings and industries. secure energy supply and the reduction of greenhouse gas emissions. This has been translated into the 2030 objectives of the Energy Union, notably reducing Europe's energy use by at least 27 % compared to the baseline, and a 27 % share of renewable energy consumption. Since heating and cooling represent about 50 % of the final energy consumed in the EU, potential savings in this area have to be identified and promoted. Indeed, 84 % of heating and cooling in the EU is still generated from fossil fuels while only 16 % is generated from renewable energy. In order to fulfil the EU’s climate and energy goals, the heating and cooling sector must sharply reduce its energy consumption and cut its Fig. 1: District Heating Systems in Europe. Halmstad & use of fossil fuels. Aalborg Universities 2013. In February 2016, the European Commission National proposed a strategy to make heating and cooling The first Swedish district heating system was in the EU more efficient and sustainable. This introduced in Karlstad in 1948, when a thermal strategy highlights the capacity of district energy power station was converted to a combined heat systems to integrate the increasing share of and power (CHP) plant and heat was provided to renewable electricity generation (e.g. through an industrial facility. Nine major municipalities the use of thermoelectric equipment) and to introduced district heating systems during the replace fossil fuels with waste heat and cold from 1950s. Nowadays, all major cities and towns in industrial processes, waste-to-energy and Sweden have district heating systems. Current renewable energy sources such as geothermal, national statistics lists about 500 systems, also biomass, solar thermal. including small district heating systems in small towns and villages. Efficient district energy systems can play a key role in the energy transition towards a low- Customers buy district heat from the heat carbon economy, acting as a backbone towards distribution systems in competition to other heat efficient local energy systems. Some European supply, since mandatory connections have no cities have already recognized the benefits of legislative support. Historically, district heat has these systems and developed efficient and mainly substituted fuel oil boilers as illustrated in 2 Fig. 2. This figure reveals also that the increase of number of projects and the overall level and pace market shares has been very steady during the of investment, but private investment is clearly fifty years presented. District heating is currently the most important source of financing of smart the market leader with a market share of about grid projects. European and national funding 55% during 2014 for all heat supply to buildings. however, play an important role in leveraging private finance and incentivizing investment. Distribution system operators (DSOs) are the stakeholders with the highest investment, but non-traditional actors such as public institutions and other emerging stakeholders are steadily increasing their investment in the field. The domains with highest investment are smart network management, demand-side management and integration of distributed generation and storage, together accounting for around 80 % of the total investment. Many Fig. 2: Market shares for heat supply to residential and service sector buildings in Sweden between 1960 and projects however address several domains at the 2014 with respect to heat delivered from various heat same time to investigate and test the systemic sources. Sven Werner. integration of different solutions. During the last two decades, the use of individual The distribution of these projects is shown in the heat pumps has been expanding and is now the next figure although one must keep in mind that main competitor to district heating with a market these projects are around electricity rather than share of almost one quarter in 2014. heat networks, let alone the combination, as demonstrated in the FED project in Gothenburg. Smart Grids, however, are usually synonymized for electrical grids. In fact, when asked for a definition

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